Chegg Inc. Faces Downfall Amid AI Disruption
AI wipes out a former Wall Street favourite
Thestreet
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Chegg Inc. (NYSE: CHGG), once a leading American edtech company, has seen its market value plummet due to the rise of generative AI tools like ChatGPT. From a peak stock price of $115 in February 2021, Chegg's shares now trade at just $1.02, leading to significant layoffs and a drastic reduction in market cap.
- 01Chegg Inc. has become the first major company to be significantly impacted by generative AI.
- 02The company's stock has dropped from $115 in February 2021 to $1.02 currently.
- 03Chegg laid off 22% of its workforce in May 2025 and 45% in October 2025.
- 04The rise of AI tools has rendered Chegg's services largely redundant.
- 05Other industries, including crypto, are also pivoting to AI in response to market changes.
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Chegg Inc. (NYSE: CHGG), an American edtech company known for its homework help and online services, has been severely impacted by the rise of generative artificial intelligence tools like ChatGPT. Once valued at a market cap of $14.7 billion with stock prices reaching $115 in February 2021, the company now struggles with its stock trading at just $1.02 and a market cap of $114.59 million. The shift in demand towards instant AI-generated answers has rendered Chegg's offerings largely obsolete, leading to significant layoffs of 248 employees (22% of staff) in May 2025 and 388 employees (45% of staff) in October 2025. This drastic decline showcases how AI is not only reshaping the education sector but also threatening other industries, including cryptocurrency, where companies are pivoting to AI to remain competitive.
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The decline of Chegg signifies a shift in the education sector, affecting students who relied on its services for academic support.
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